Good afternoon, everyone, and very welcome to this investor update. We're sending live from the beautiful city of Stockholm. The sun is shining, and it's a Friday afternoon, so let's make this a good one. My name is Rikard Fröberg. I'm the newly appointed CEO of Hexatronic Group. I started my job on March 1, so I am now on my 20th working day with the company. I've spent most of that time on the road to meet our people and our customers. I have to date visited 15 Hexatronic sites in seven countries and a handful of key customers, two trade shows, one in North America and one in Europe. I'm on a steep learning curve and absolutely delighted to be here today. Let's talk a little bit about the purpose of this session.
The main purpose today is really to provide some more flavor and insight about our three newly created business areas. You'll hear about their market dynamics, strategies, and priorities. We'll also provide restated numbers for each business area for 2024 to create that comparability and transparency, as this is now the structure we will be following in our segment reporting going forward. We will also talk about top priorities in 2025 and answer questions at the end. I know people are keen to hear about our current trading and recent developments in the market, but this is not really the purpose of today's discussion. We're maintaining our view from the Q4 report that we are cautiously optimistic about 2025, and we will, of course, look forward to reporting our Q1 results on April 29th. Let's take a look at the agenda and our presenters. Intro is first.
We're already into the introduction right now. This will be followed by an overview of our Fiber Solution business area presented by Christian and Tomas. Next, we will move to Data Center, and here we will hear from Martin and Ben. After that, Harsh Environments will be presented by Jakob and Phil. Last but certainly not least, Pernilla will walk us through the financials. I will wrap things up before we go into the Q&A session. You should all be able to type in questions as we go into the chat function. Let's start now by taking a quick look at the Hexatronic Group. We are today a global business with operations in over 40 countries around the world and sales in over 100 countries. A little over half our turnover is from Europe.
Sweden is our whole market, but it's less than 10% of the group business today. North America stands for close to 40%, and the U.S. by now is our single largest country in terms of revenue. APAC sales are just under 10%, and that is largely Australia and New Zealand. As you can see, we're quite well diversified geographically. We also have no single customer accounting for more than 3% of total sales. Our 18 production facilities cover the market well with production in each of the continents where we're active. It has been, for a while now, an important part of the strategy to have local production to be close to our customers. This is extra important and a strength in a world when global trade barriers are only increasing.
We have about 2,000 employees, and revenue in 2024 was just over SEK 7.5 billion with an EBITDA margin of 10.6%. If we look at the longer-term performance of the business, Hexatronic Group has seen very strong growth over a number of years. This growth has been both through acquisitions and organic, and in particular during 2022 and 2023, the strong market situation provided exceptional growth for our business. However, as is often the case, this strong growth was then followed by a bit of a hangover and actually decline in 2024. Important to note that most of that decline we saw in the first half of 2024 and some stabilization in the latter part of the year. The five-year compounded growth rates, as you can see from the slides here, are very healthy, and also the organic compounded growth is a healthy 9% per year.
Now we're coming to the business areas. If you have followed Hexatronic, you probably know that for some time we have talked about focus areas. As these have grown, we're now at a point where we feel it's appropriate to take the step and operate them as business areas. Each business area has attractive growth opportunities, but the customer base, market dynamics, and strategies are a little bit different between them. That's why we're now creating a structure to operate them as distinct business areas. This is not only segment reporting, it's how we run the business. Fiber Solutions, where it all started, is still over 70% of the business of Hexatronic Group. It's a business that mainly serves the FTTH, or fiber to the home market, but also wireless, security, and submarine cable solutions.
We have invested in capacity here, and we're ready to take on higher volumes and get operational leverage. Next is Harsh Environment. This business provides tailor-made cables and other highly specialized products for many industries, with energy and defense being the main ones. The third business area is Data Center, and here we provide both services and products serving the ongoing build-out of data centers around the world. This business area currently has the highest margin, almost 16% EBITDA, and it's got low capital needs, which makes for a pretty attractive financial profile. We see a number of global trends, or mega trends, if you like, that are affecting our markets. First, digital transformation, perhaps a little bit of a buzzword, but there's no doubt that there's a huge shift going on, and in particular, Regenerative AI is driving enormous needs for data processing and data transfer.
We see energy transition towards renewables, mostly wind and solar. Sustainability is an increasingly important trend, as in on the agenda for many of our customers across all of our business areas. I would say that in some areas, we see this going from a nice-to-have to a must-have. Security is another trend. If you think about the cameras that are recording outdoors and indoors these days, it is much higher than just a decade ago, and that number is only increasing. All these cameras need to be connected to power and data transfer. Finally, we see a geopolitical trend towards protectionism and away from global trend. It seems that things are happening every day, and it is quite hard to say exactly where things will land. The direction of travel is clear, and it is favorizing localized production.
When we then compare Hexatronic's position, we see that we're quite well aligned to those mega trends. First, we're in markets that have exciting growth opportunities, and you will see that in the upcoming presentations from our business areas. Second, we're selling a whole suite of products, and we can provide customers with solutions, not just the product. In this, we're a little different than some competitors who may perhaps provide only one type of product, whereas we can provide the whole range, including necessary services, training, instruments, and tools. We have manufacturing in 18 production sites, generally located in-market, close to our customers. As noted, we can easily ramp up production within the existing footprint. Hexatronic has strong brands and products that are known for performance and features that help customers improve their productivity. We feel on sustainability that we are market-leading.
Finally, we have a healthy and exciting M&A pipeline. My last slide now will summarize what I see as our top priorities for 2025. First, we need to turn Fiber Solution business back to growth, and the U.S. market is probably our biggest opportunity. It's a large market where we have a relatively small share, plus we believe that the airblown technology will over time gain share and traction. We can leverage our completed CapEx investments for further growth, and we're also exploring ways to further diversify beyond just the FTTH business into other growth areas like submarine, security, and wireless. We will continue our sharp focus on operational excellence and also renewed focus on innovation.
For Harsh Environment, margin improvement will be a top priority, and data center is really all about how do we accelerate growth, how quickly can we grow without jeopardizing the quality of that growth. One way to do that is to execute on our M&A pipeline, which is focused on Data Center and Harsh Environment. Finally, I'm new in the business. I'm still quite early in my first 100 days, and it will be natural for me to work with the management team to review and validate our strategies and business plans to ensure that we have robust plans for the long term. With that, we will move to the first business area, which is Fiber Solutions, and I hand it over to Christian and Tomas.
Thank you very much, Rikard. In fiber solutions, we would like to give you an overview, talk about our markets, touch upon a customer case, which is Nova's fiber in the U.S., discuss innovation before we will round it off with our strategic priorities. I am Christian Priess, Head of Fiber Solutions in EMEA, and I'm joined here with my colleague Tomas, who is Director of Product Portfolio Management in Fiber Solutions also. We have a broad range of products and solutions that solve customer needs. First and foremost, in FTTH and transport networks, these are cables, ducts, network products that are customized to local needs in most markets. We have submarine cables for telecom projects and offshore windmill parks. They are long, stationary, unrepeated cables up to 400 km, and today up to 192 fibers and up to 288 fibers or even more in the future.
There are big differences to the submarine cables in harsh environment business areas, which are much shorter and dynamic and often hybrid cables with, for example, copper in them for power. We have conduits and pipes, which is mainly in the U.S., but also in Europe. We have instrument and tools, blowing machines for blowing cables into ducts, splicing equipment to splice the fiber cables together, and finally, monitoring systems to make sure that you have done measuring and monitoring to make sure you have done everything correctly. In wireless, we have products and solutions for small cells, for big cells, cables, fiber, and power to the antenna. Finally, we then have training where we train our customers, installers, etc. We have had a strong sales growth in the past many years. Here you see sales development on a rolling 12-month basis, meaning seasonality has been taken out.
You see a positive sales development till mid-2023, where after markets slowed down, we had a negative sales development until Q3 2024. From Q4 2024, we have seen small positive increases. In 2024, we had a total turnover of SEK 5.4 billion in Fiber Solutions and an EBITDA of 10.8%. Generally speaking, our facilities are well invested and have capacity to increase sales worldwide. Looking at our portfolio, we have quite a well-balanced portfolio and a broad customer base with diversified sales. We do leading solutions, enabling fast and efficient deployment of fiber optic solutions. Sales per geography is a little bit more than half Europe, a little bit more than a third North America, and the rest, around 10%, is APAC and the rest of the world. We have quite a diversified customer portfolio. Top 10 customers account for 30% of sales.
In the pie chart to the right, you see the big gray area. These are smaller and medium-sized customers in our local markets around the world. We have a strong presence with local manufacturing in main markets. If you focus here on the U.S. and you focus on the blue dots, you see that we have four manufacturing facilities in the U.S., strategically placed across the country. They are micro duct and conduit factories, and we are looking into establishing fiber cable manufacturing in the U.S. by Q2 2026. Looking at Europe, in Sweden, we have manufacturing of fiber optic cables and ducts, in Estonia of termination for cables. In Europe, in the Netherlands and Austria, again, micro duct manufacturing, also in Korea, where we basically sell to all major markets in the world, in the U.S. and in Europe in particular.
We have micro duct manufacturing in New Zealand, for New Zealand and Australia, and we have a smaller termination facility in Australia. The green dots are our sales companies, and as you can see, we are basically represented in all major markets in the world. Finally, the orange dots are training facilities, where we have three in Europe and one in North America. Looking at market segments and drivers, starting with North America, market is expected to grow in the coming years. There is a mix of private and public funding of network build-outs. You might have heard about the BEAD program, the Broadband Equity Access and Deployment program in the U.S., which is US government money to build out fiber. There are tariffs and protectionism that will come into place or might come into place, and that will, of course, give an advantage to local manufacturing.
We have a strong position in our conduits and pipe business. We are very strong, number two, in the business, and we have quite a low share in fiber optic systems, which we definitely think will give us good opportunities to grow our market share based on our airblown technology, meaning doing concept sales. In Europe, we expect the markets to show flat growth. There will be a shift from homes passed to homes connections. Homes passed market will go down, but home connection market will go up. There will definitely be focus on cost-efficient solutions as price pressure is expected to continue. We have a leading position in the Nordics and quite a sizable position in the U.K. and in Germany and in other key markets. For APAC and rest of the world, we expect to see moderate growth.
There is no universal technology that goes also for Europe and the U.S., only network-specific solutions. We have a leading position in Australia and New Zealand, and we have, as I mentioned before, quite strong export business from our facility in Korea. I want to spend the next word on submarine cables because we see a growing demand here. As I said before, we manufacture these long-length unrepeated submarine cables in our facility in Hudiksvall in Sweden. There is an ideal fit for medium distance, typically connecting countries in Europe. That could be, for example, from Sweden to Finland, from the U.K., to the Netherlands, but also more global business like connecting islands in the Philippines or in the Caribbean. We have a power out here on the screen. One second, please. Our screen here went off. If they still see it on the presentation, I can continue. Is it standing? Then we can just continue.
We can continue. Good. I continue. I was coming from the submarine cable business, medium distances between countries in Europe and, for example, islands in the Pacific or Caribbean. This is global business. We see a growing demand in the telecom business, in particular for offshore windmill parks, and that is driven by Europe's green transition. Now I'll hand over to my colleague Tomas.
Thank you, Christian. Hello, everyone. I will start with a question: why Hexatronic Fiber Solutions? Our main differentiator is the fact that we offer a complete system solution that enables a cost-efficient network deployment for our customers. If you look at the split between materials and labor in a typical fiber-to-the-home project, you see that about 20% is material, so that's where we are, and 80% is installation services or labor to actually build the network. For us, it's a big focus to lower the cost, the total cost of ownership for our customers by introducing a complete system solution that works together. The products are designed to work together seamlessly. They are easy to install and enable a low total cost of ownership, and at the same time, bring a sustainable solution. Apart from that, we are more than just a supplier.
We have a close partnership with our customers. We offer a service called Field Support, where we have highly skilled technicians that help our customers if there's a problem in the field or perhaps during a startup of a new project to make sure everything runs smooth. We also offer more advanced training and certification courses so that we can train the designers or the staff doing the installations for the customers to make sure that there's a smooth rollout. We also have high-end products. We own the design of all our core products. We can manufacture products, like Christian just said, in North America, in Europe, and in APAC, and we have a very extensive quality control of our system. Combining all this together, we can really enable a cost-efficient network rollout for our customers.
Speaking of customers, we have a very relevant case here with Nova in the U.S. Let's talk about them first. They were established in 2022 in Dallas, Texas. They provide broadband services to residential areas by designing and building fiber-to-the-home networks. They have chosen to use the full Hexatronic solution, meaning the passive solutions with cables, ducts, cabinets, and all. They use our field support or site support. We have also offered them training services for the design teams, but also for the construction teams building the networks. We have a quote here from the CEO: "We selected Hexatronic based on their value proposition, flexible and cost-effective network architecture, and ability to meet our aggressive timelines." This is a typical customer that we target with our system offering: small to medium, private equity.
We can help them build their networks very efficiently. We will look into the future a bit. We heard about the trends from our CEO previously. For the fiber solution part, there are some very, very strong trends that drive the demand of fiber optic solutions. One is sustainability. Again, it affects us all. It's an extremely broad topic. For us, it is a cornerstone in our value proposition because we can help with our innovation so our customers can meet their targets. We are working with miniaturization to reduce the amount of materials in the products. We're using new materials with less CO2 footprint, and we work with recycling, efficient shipping, and so on. There's a lot of work and innovation going into that area. We have closing the digital divide, which means bringing connectivity to underserved areas, which are typically in rural settings.
For us, that is another challenge, a technical challenge, because we need to bring fiber for long distances to areas where there's a low density of people living. That's a specific technical challenge for us. Christian mentioned the BEAD program in the U.S. There are similar programs going on in Germany, the U.K., and in fact, all the markets we operate on. A very important area as well. Wireless was also mentioned before. Today, most of the investments in 5G, particularly in Europe, are focused on coverage and higher bit rates. What we will see in the future is a densification of these networks: more cell sites, smaller cell sites, closer to where people actually are, urban areas, indoor environments, and so on. This is another area of innovation for us: bringing fiber, power, and also concealment technologies for these cell sites, antenna, and other equipment.
A very important area for us. We also talked about digitalization and AI before. While we will return to the Data Center business soon, this is also a great opportunity and an area for innovation for Fiber Solutions because these Data Centers need a lot of connectivity. We have many projects already bringing fiber to the Data Centers, connecting them to the wider core networks and transport networks. We're working with high fiber count cables, new fiber types like multicore, hollow-core, and so on to increase the capacity of these networks driven by data centers and digitalization. Electrification is another area. We mentioned wind farm parks before, and there's a lot of communication needs to building these very complicated structures. Both for submarine and terrestrial applications, we will see investments and need for innovation for this as well.
Not only wind farms, but other electrical grid investments, EV fleets, and so on. Also a very strong trend for us to look into. Last but not least, we have world volatility and uncertainty. We see a lot of investments in security systems, perimeter security, and various defense applications that also need power and fiber in combination. There are very strong trends driving demand for fiber optic solutions, and we put a lot of effort innovating in these areas. Over to you again, Christian.
Thank you. Growth opportunities that we see in fiber solutions and our strategic priorities keep our focus on solutions to small and medium-sized customers. We have good innovation in the pipeline with easy-to-install, sustainable, and cost-efficient products with the best total cost of ownership, drive market share, and take advantage of those opportunities that we see in the U.S., especially with locally manufactured solutions. As I mentioned before, in Q2 2026, also with fiber cables. In Europe, it is more a focus on operational excellence and explore the future growth opportunities, like what we mentioned, the growing market in submarine cables, security, and the rollout of wireless 5G, and from 2030, also 6G. That concludes it for Hexatronic Fiber Solutions, and I am now happy to hand over to my colleagues in Data Center. Thank you.
Thank you, Christian and Tomas. I'm Martin Åberg, Deputy CEO of Hexatronic and responsible for our Data Center business area. I'm very pleased to have with me here today Ben Parker, CEO of IDS and responsible for our Data Center services across EMEA. Together with Ben here, we will have a deep dive into our offering, and we will particularly zoom into our service offering. We will talk about our long-term growth strategy, talk about organic initiatives, but also on the M&A side, M&A strategy, very exciting going forward. We will provide a market overview, talking about trends, drivers, market structure, and how the different segments, the outlooks for them going forward. Those are the three areas that we will cover in today's session.
Starting with a financial overview, we established a platform over the last years that is structured for continued growth, focused towards the end customer segment data centers that is now formed into this business area. Over the last three years from 2021, it has been growing to SEK 1 billion in sales, roughly $100 million, which corresponds to an average annual sales growth of 54%. The majority of the sales has been acquisition-driven. We've done approximately one acquisition per year, but it's also been a very healthy organic growth. We have been growing with good profitability. If we look at our legal entities and look at the profitability or the EBITDA margin, throughout those years, it has been between 14%-18% EBITDA margin. If we look at the average annual profitability growth, it has been close to 50%.
We have been growing steady sales, but maintained a very good profitability throughout this period. With that short introduction, I would like to leave over to you, Ben, to talk more about our offering and also provide a market outlook for the next years.
Thank you, Martin. Here we have our four Data Center market segments. We start the Data Center journey with the on-premises enterprise clients, owner-managed data centers. These are heavy CapEx Data Centers, slow technology path, and a more traditional way of managing your data. Still growth in that region, and we're still happy to provide services to many of our clients in that sector. This has led to a push and a transitioning to what we classify as off-prem, off-premises. This is where the colocation segment comes into play. These are carrier hotels, a good step for off-premises data centers. Close to your other customers and high-speed routing, this also gives customers the ability to test and try out and move into the cloud.
Colocation serving cloud integration, over the past 7+ years, this segment's gained immense speed, aided in hyperscale growth globally and at a large rate with the ability to take very large power requirements very fast as facilities are already constructed in the colocation market. We've been working with the hyperscale clients since 2014, and we've been a pivotal part of that transition, I think is the best way to say it. We're a partner for them for several key leaders of this sector. The combined growth and strategy of colocation and self-build, hyperscale market growth of 15%-17% per year signifies immense investment, and they're readying themselves for the new world of high density and AI workloads. Here we deep dive into our four key offerings for our Data Center services.
We are uniquely positioned to provide ICT services of deployment across the U.S. and EMEA in these four sectors. ICT services, here we design and build the Data Center networks, working hand in hand with our clients and our customers for installation anywhere across EMEA and the U.S., and then managing the cabling infrastructure with our day-to-day smart hands teams. This is a highly demanding sector of our services and where we're seeing the most growth, and it's above market trends. Connectivity is our bespoke fiber optic assembly offering, patch panels, fiber connectivity solutions to the end user. Containment is our hot and cold aisle containment products offerings. These products are necessary in every Data Center. They provide efficiency, dividing the hot and cold air in the Data Center to provide high levels of efficiency and utilization within that Data Center.
Every facility built requires these products, and we manufacture, supply, and install these services across EMEA, and this provides an extra layer of products to our clients. On the land sector, this is the supply of copper-based systems for commercial projects, end-to-end structured cabling components, panels, cabinets, and wall boxes. It's a full-turn-key supply solution for our customers, and they're very happy with that. As you can see, this is a wide range of offerings to our clients, and we make their lives simpler by having this single source for multiple supply. What revenues are available and where are we positioned? Right at the beginning of this amazing graph, the design phase is a very intense part of the stage where we live. Our designers provide full design programs for our customers across EMEA.
This is the very start of the project, and this could be several months of workload in this sector. A very interesting part of this graph, and it's part of the program that we've been studying for some time now, is the M&E and electrical requirements. Electrical opportunities are a constant requirement in Data Centers, and we at Hexatronic have been working and looking very closely at acquisitions in this, what we classify as a gray space. IC fit out is exactly what it is. From our designs, we turn a white box or an entire facility into a network-ready operational data center, and that's ready then for their IT. We've got more than 300 engineers across this region, and this is the most challenging phase of the life cycle of a Data Center. It's the most demanding, and this is where we really excel.
We have managed services, or what we like to call day two, engineering support for our customers. These are daily cabling requirements, and this is where we can support the customer in the Data C enter for many years. We have teams that have been on campus now for more than five years, so a lot of cabling, Martin. Decommissioning, relocation, migration, this is always a part of the life cycle of a data center. The managed services, the blue bar extrapolated, could be out for many, many years, but eventually something needs to turn over. This is where we support our customers and upgrade either their current data center or geographically locate their facility. As you can see, we have many sectors covered. We are very well positioned for what we call a high wallet share of the Data Center life cycle.
Thank you, Ben. Moving over to the sales breakdown. Overall, we are very focused on the Data Center and Customer Market, but we are well diversified both in terms of our offering and on the customer base. Starting on our offering side, approximately 45% of our sales today is towards ICT, what Ben just talked about and we will dig deeper into in a few minutes. The other 55% is quite evenly split between connectivity and containment. Connectivity being fiber optical systems mostly for Data Centers and LAN being Ethernet-based systems for commercial buildings and so on. We also have containment that you can see here. It is a very small portion of the sales today. You introduced it last year in Europe, and we also introduced it in the U.S., last year. A great growth opportunity for the next few years we see.
Moving over to the customer segment breakdown. Here we have what we call the Cloud segment, accounting for close to 40% of our sales. That is what Ben initially talked about, the hyperscaler and the colocation, together being the 40%, and that is the highest growth segment in the marketplace today. The remaining 60% of the market is evenly split between enterprise and others. On aggregate, Data Center is roughly 70% of our sales today. Finally, we look into customer concentration, and we have a number of larger accounts, very strategic to us, that we have been working in for many, many years, and we'll continue to serve as strong partners. All in all, broad customer base with a top 10 customers account for roughly half of our sales, 50%.
Looking where we are present today, we are established in North America and Europe, the two main markets for Data Center builds today. According to the latest Delora forecast, those geographies accounted for 70% of the world market. When they look at it until 2029, they will still be at similar levels. Amazing builds in those regions that we are established. Our split of sales is roughly 62% in Europe and 36% in the U.S., so close to 100% in those regions. Vast growth opportunities, it's here we will focus for the foreseeable future. We're based here, we have the networks here, we know what to do. In terms of offering, we have a balance split between our product sales and service sales, and we see the largest growth opportunity on the services side.
I will again leave over to you, Ben, to talk more about our services and why we have been successful in the EMEA region.
Thank you. Managing EMEA as borderless has been our mantra for more than 10 years. The capability of moving EMEA, our skilled workforce around EMEA, has been a driving factor for our customers to bring us on their journey. Same team, any country. With a white glove hand-holding service, we have gone far and wide with our customers, acquiring new customers wherever we go. Ten years experience designing and running hyperscale deployments does not come easy, and our knowledge relationships in countries across EMEA and the proven track record makes this business extremely hard barrier to entry. Centrally managed deployments for over 70 projects in EMEA at any one time. It is similar to an air traffic control facility at our head office in the U.K. New countries every year, new challenges, new opportunities in the data center and the hyperscale industry is a fantastic business to be in.
Every year, our customer demands are getting larger and more exciting at the same time. With over 2,500 projects delivered in 10 years, we're extremely well positioned for the growing demands over the next 10 years.
Before we summarize the Data Center presentation for today, we would like to also talk about our M&A strategy that has been instrumental to the sales growth we've had in the past, and it will also be instrumental going forward on the journey that we have ahead of us. If we look on the, we've talked about both the product and the service side today. If we look and start on the product side, that is a mature market. It is highly consolidated, whereby we have the service side that is highly fragmented. This is, of course, ideal from an M&A perspective. Our ambition going forward is to continue to grow the ICT services. We'll continue being part of that consolidation in that market. What we also will look into is adding adjacent businesses.
There are a number of other services requested already today by our existing customers. Ben mentioned earlier on the electrical side, we get the requests. We're doing the ICT work on the same location to the same customer, and they request us or ask us to do that services as well. We look into getting in there, and we have a few other applications or services that we also see would make very much sense to add to our offering today. A few examples are indoor wireless solutions, DAS solutions. Another thing that is critical in a Data Center is, of course, security. We're talking about cameras, access control, so that we are very much looking into today.
If we move from services and applications into the segments, I mean, the Data Center segment that we said before, that is the bulk of our business today, and that is really what's driving the market. There are also other segments requesting the same services. Just to mention two examples, we have demanding industrial sites, and we have schools and campuses that have a lot of needs for ICT and security, just to mention a few, and especially in the U.S. Continuing on the M&A, as I mentioned, the services side has been highly fragmented. Our focus is North America and predominantly Europe. We have made a structured search on the services side, identified more than 200 companies, small and mid-sized companies. We have ongoing discussions at all stages with potential sellers.
As Rikard initially said, I mean, we have more focus on our acquisition agenda towards data center and harsh environment. Ambition to scale up from doing perhaps one acquisition per year to three and even higher numbers per year. We will continue having a low-risk approach when it comes to acquisitions. We'll be very selective on the teams and the companies that we will approach and work with. We'll continue in the market where we are established, where we have the networks, where we know the good players. We will also continue with acquiring small and mid-sized companies. We're talking about enterprise value, typically below EUR 50 million. In terms of valuations, we see multiples, EBITDA multiples typically of in the interval 5x-7x EBITDA.
We will also make sure to have aligned interests with the management teams and the selling entrepreneurs to really drive the business forward post-closing and using earnouts also to reduce risk and get aligned interest or minority shareholdings. Continue with the Hexatronic very decentralized governance model. All in all, I mean, we have a proven track record in M&A, quickly integrating businesses. Again, doing roughly one case per year, our ambition going forward, we see great opportunities here to scale up that acquisition activities. A final slide to really summarize where we are and the opportunities we see ahead of us. It is all about growth. We have a strong underlying market growth. We see very interesting acquisition opportunities in the markets we are in. The business generally has healthy margins. It is very Asset-light, so it is a good cash conversion.
If we start looking again on the market, taking the hyperscale and colocation, where it's the strongest growth segments going forward, that is 40% of our sale. We continue to invest and grow further here with our customers and adding new customers as well. On the acquisition side, we'll be very active. We'll continue in the markets where we are and with this proven low-risk approach and acquire companies at attractive multiples. Finally, if we look at data center, we see it as a very attractive financial profile. We see its healthy margins. Historically, as we said before, 14%-18%, and we closed last year at 15.9%. It's very Asset-light. I mean, CapEx, 1% of sales or even less. Looking at networking capital, the same story, roughly 12%-14% to sales. All in all, very exciting years ahead of us.
That was all for the Data Center. We would like to welcome Jakob and Phil and introduce the harsh environment business area. Thank you.
Thank you, Martin. I hope today to give you an overview of the Harsh Environment footprint and cover some of the main applications. We will dig deeper into, especially the offerings within the dynamic cables. Here I have the pleasure of having Phil Ashley with me. He's the CEO of Fibron Cables. Just a quick sentence on the nice picture you see on your right. It's from one of our customers, and you can actually see our working cable there being reeled just above the robot. Phil will, of course, enlighten you much more about these cool areas we are in during the presentation. Let me spend quite a while on this one. Harsh environment consists of three business areas: dynamic cables, connectivity solutions, and critical sensing. Let me go from right to the left, starting with the critical sensing.
We have a legacy sale in Proximion based out of Sweden into backbone networks that we will maintain. Over the years, the strategy has been to still capitalize on this know-how and deploy it into the growing fiber sensing businesses. Our value proposition here is quite unique. We give the customers a very accurate sensing of temperature and strain. That kind of parameters are primarily used in process industries where you have very high value-added processes, where you wish to really understand, for safety or efficient reasons, the accuracy of your temperature. Part of such a system is depicted here down to the right, where you will place the fiber inside this metal tube that is then down into a tank or equivalent. Installing such optical sensors also drives the need for fiber optical cables and connectorized solutions.
There is a very close sales cooperation with the connectivity unit. The connectivity solutions are mainly serviced via Hexatronic Norway and Tech Optics in the U.K. We serve all the businesses we are in, being defense, industry, and energy. We often act as trusted advisors, mainly to OEM companies that need to have either stationary or temporary optical connectorized solutions that they can reel on or reel out in very harsh environments. Our strength is a deep optical understanding on how you can combine optical cables, often from two different vendors, to connectors. Over the years, we have grown a very profound close relationship with key customers, almost acting as an integral part of the customer design cycle. Our expertise is in the design of such solutions in harsh environments, being offshore or being in very extreme temperature ranges.
Finally, to your left, you have dynamic cables, where we have Rochester Cable in the U.S. and Fibron Cables in the U.K. The cables we produce here are called Umbilicals, as Christian mentioned earlier, because they act as a multifunction cable carrying both energy, optics, or data, as well as in Fibron cases, we often have a third function being fluids. Hence, it acts like an Umbilical. The process, and you have a picture of such a process on your left below, are relatively complex and require a combination of understanding extrusion, different materials, bundling copper, fiber, and conductors, even hoses in Phil's case, into one hybrid. We strengthen this cable so that it can operate in very harsh environments, often with steel armoring. In this case, you can see a braiding attached on top of the cable.
The cable is often then reeled on, reeled off in very dynamic areas. On the top, you see a cable attached to a robot. This robot is called an ROV or remote offshore vehicle. This is the working class of robots for most of our customers. These are workhorses used in multiple offshore applications. Luckily, Phil will go into some of the more exciting parts of that later on. We have, in a very short period, grown from a small player to a global strong niche player via the two acquisitions in 2023, Rochester Cable in the U.S., and then followed by Fibron Cables, both acquired, as I said, in 2023. It compounds to a 165% sales growth over a very short period. We managed to do around SEK 1.2 billion last year. EBITDA margin, as you can see, ended up in 10.3%.
This is not in line with what we had expected, and it was mainly due to the challenges we had experienced in Rochester. The carve-out that we did from TE has proven to be a little bit more cumbersome, but we are on the right track, and we have done what we think are the right plans, and we look forward. With Fibron, we have a strong internal benchmark as well. Looking at where our revenue generates, it is from long investment cycles and recurring customers. As you can see on the left side, these revenues are primarily driven by dynamics. Hence, the rest of the presentation today will be zooming in on the dynamics. We have a very broad customer base and a favorable mix of attractive global customers in defense, in industries, and in energy.
We also have a low customer concentration, and the top 10 customers have been there for multiple years, and we seldomly have one or two projects that pop in and out. If we zoom in a bit on the main markets we play in and the underlying market drivers, in energy, we are driven by renewables, we're driven by oil and gas, and foremost service and subsea engineering companies. In renewables, we see an increase in requests for projects where dynamic cables can play a role, and Phil will give you an example of such an opportunity in just a minute. We also do sell connectorized solutions into energy in conjunction with an increased need for optical condition monitoring. The energy consumption is projected to grow around 5% on an annual basis, even beyond 2030.
In the defense sectors, we actually sell to all areas, being Army, Air Force, and Naval. However, it is primarily Naval that drives our businesses. We both sell towed cables as well as onboard connectorized solutions. An onboard system could be, for instance, a radar system that is then deployed with two different types of connectorized solutions. When I said the word towed cable, you should consider a towed cable like a part of a sonar system where the defense sector can use it to actually survey over a vast area. This kind of surveying or towed cables is also sold into the bucket we call industries under the name Oceanographic. If we jump back to the vehicle that drives the Naval businesses, it is, of course, driven by the general increase in NATO and national spending, but foremost, it is the build-out of new submarines and/or upgrading of existing fleets.
I'll hand over to Phil to give you some exciting examples of our businesses.
Thanks, Jakob. We wanted to cover a couple of slides now just to give a little bit of flavor and color of the type of products and things that we're doing within the dynamic cable business. This is an ROV cable and a customer scenario, I think probably worth a little bit of explanation. ROV for us within the dynamics business represents something like 15%-20% of our total sale as you combine us and Rochester. What are ROVs? They're remotely operated vehicles, robotics that work subsea. They can be 40-kg observation class, and they can go all the way up to a 10-ton trencher that would plow paths for pipelines and major optical cables. It's a wide-ranging business.
I think the one we focused on here in the slide, this is an Anglo-Norwegian vessel operator who are in the process of investing in a range of vessels to lower the personnel and carbon footprint of offshore intervention activities. They came to us with a problem. They needed a narrow cable that could power an underwater robot, but it needed to be extreme high strength. We ended up putting five layers of steel wire armor on there such that it had over 12-ton breaking strain. The cables themselves are running 6.5 kV, so thousands of volts, but in incredibly narrow copper sections. This is a thin-wall technology that we as a company have been working on for the best part of 15 years, developing and improving. Also on board then is a fiber optic cable that provides all of the telemetry and communications to the underwater vehicle.
In this application, the cables were needed really quickly. That was something that we, as a specialist engineering prototyping company, as well as being a manufacturer, were able to take on the engineering challenge of the customer. We were able to do that in a sort of, for them, record time to support the build-out of vessels and lower the cost of installation onto the vessel. The cable itself is being used by the vehicle operator to do cone penetration testing. They are taking the remotely operated vehicle and some tooling, and they are drilling small holes in the seabed at various locations around the seabed to establish the oceanographic layout so that when they go and put an offshore wind farm or an offshore oil platform in place, they understand fully what the seabed is. Lots of challenges for us around the reliability of the product.
When these vehicles are on, when the boats are on station, they're very high cost. The reliability of the cable is super important as well. In this instance, we built and designed the cable in the U.K., in the Hoddesdon factory, but we have the unique capability that we could have equally done the exact same job from our Rochester facility and put a made-in-USA label on it. That is something that's absolutely unique to us as a business. As a secondary example, something maybe that's from a product perspective looks and feels completely different, but actually a lot of the engineering and activities are quite similar for us. This is not a steel wire armored umbilical. This is something that is armored with polyester and aramid fibers. We were approached by an engineering contractor. We've been approached by several for this particular application.
The design challenge that's being approached is for offshore wind farms, especially as people start to look at floating offshore wind. They're a long way offshore. The diesel vessels and the diesel supply vessels that are supporting those wind farms are using significant amounts of diesel. There's a challenge that the industry has to move to electrical vehicles, to battery-operated vehicles. The ability to charge those vehicles on location is something that a lot of the industry is looking at. We were approached by a specific customer. They came to us because we had both the capability to do the design work internally, but also to integrate a number of different applications. We brought in some very, very soft, flexible power cables. We built some of our own signal cables. We put fiber optics.
We also put what effectively were hydraulic tubes, but in this application, they were not used for providing hydraulic power. They are used for actually cooling the prototype. At that point, nobody really understood when you were doing these operations whether you would have an overheating problem in the cable. Again, we have a unique set of capabilities that not only could we do multiple iterations of a design, but we could do it very quickly. There is a challenge also with a cable like this that it needs to be super flexible because it needs to be reeled on and reeled off on multiple occasions. This is something that we, as a small independent manufacturer within Hexatronic, have this ability to not just look at one solution and say it has to be armored, it has to be steel, it has to be a certain type.
We were able to design a solution to deliver it quickly, to look at iterations, and then look at future opportunities. I think this is the type of project we're looking at a lot. It's not necessarily volume manufacture, but we're looking at offshore wind as a really, really big growth area for us. This, along with multiples of other inquiries, come in where we're looking at different opportunities within offshore renewables. I think it's reasonable for me to say that what the fiber team are looking at is different. They're looking at maybe longer-length static applications in wind farms. We're looking for short-length, dynamic, high-voltage applications. I think the opportunities are enormous for us. Thanks.
Thanks, Phil. Cool stuff, but lots of opportunities. Not just organic opportunities. We also have, like Martin, an active growth strategy in acquisitions. We target mainly the dynamic cable area as well as the connector business. We believe, being at the size we have within the dynamic cable, that we can participate in consolidation. We are also looking into bolt-on acquisitions with adjacent offerings as connector solutions, not just cables. In the connectivity part, we wish to strengthen both our offerings, broadening our offerings, as well as increasing our geographical reach, which is currently primarily in the Nordic hemisphere. Critical sensing is also an area for us, however, probably more in the later stage of our strategy period. Here, we look at adjacent technologies in the verticals we play in.
Like in Data Center, we have an excess currently of 40 companies that we are in dialogue with or monitoring to get closer to the Hexatronic family. I hope I've been able to give you an overview of the Harsh Environment together with Phil. We believe we have a very strong market outlook even beyond the 2030 reach. We are in segments like energy where the demand remains strong for a foreseeable future. We also play in defense markets that are quite buoyant in these years. However, maybe just a word of caution, when a decision is taken by the politicians and then being budgeted until it flows to companies like ours, it does take years. We are well positioned. We have a very strong brand. We've been in this industry for more than decades. We also see an interest in deploying Fiber Optic Solutions in the industries.
We believe this trend will continue with an increased focus on asset integrity monitoring for efficiency gains and for safety reasons. With the vast know-how we have, not just within HAAS, but in the Hexatronic Group, we believe we are well positioned to take part of that transition. As stated earlier, Rochester is, from a profitability standpoint of view, not in line with where we believe such a business could be since we have a benchmark, among others, in fiber. We have a multi-pronged approach, investing in people, training, as well as an aggressive investment in equipment and modernizing the IT infrastructure. I believe we are on the right track with Rochester. In connectivity, we expect to follow the growth for our defense OEM primes that we've been working with for many years, as well as penetrating new industries as they embrace the intrinsic advantages of hybrid optical solutions.
With this, I will hand over to Pernilla, and I hope you enjoyed looking into Harsh Environment.
Thank you, Jakob and Phil. I will start to talk about the journey or the reason for us updating our segment reporting He xatronic have had a 33% sales compound annual growth driven by both organic and acquisition-driven growth during the last five years. Organically, we have grown 9%. The expansion in fiber solutions in North America and Europe has been the main contributor to the overall growth. With the Rochester Cable and FiberOn Cable acquisition in 2023, we established a significant position in the market for dynamic cables, part of the Harsh Environment business area. In parallel, the offer aimed at the Data Center market has been gradually developed since 2020. In 2024, Hexatronic started, or we started, by sharing sales per focus area. That was based on external sales and per dedicated legal entity.
Now, in February, we announced that we will introduce new segment reporting or then business areas, and we implemented some changes in the executive management team. Here you can see our segment reporting structure. This structure is a reflection of the responsibilities and the way the business is operated within Hexatronic. The business is divided into three business areas. It's the fiber solutions, harsh environment, and data center, but also the group function and elimination. Those refer mainly to central functions such as group staff and departments, as well as other operations outside the core business within each segment. Looking into the fiber solutions, overall, we have 28 operating units, and they are based in the U.S. and in Europe and APAC. In 2024, we had a total sales of SEK 5.4 billion sales and an EBITDA of SEK 787 million, or an EBITDA margin of 10.8%.
2024 has been a challenging year for the whole industry, not just us. I believe that we have managed to navigate the market and the change conditions well. We went from a record sales in 2022- 2023 to a steep downturn in the second half of 2023, to a time of consolidation and a focus on internal efficiency and cost reductions. As reported in the year-end report for 2024, we had a full year decline compared to 2023 of 16.5%, or SEK 1.1 billion for the focus area of Fiber Solutions. We are now implementing the updated segment reporting and moving to business areas. The change to Fiber Solutions is another decrease of SEK 68 million and leading to a decline of 17.6% for the business area Fiber Solutions. This change is mainly related to reclassification of customers that belong to the Harsh Environment business.
The geographical split was for Fiber Solutions: 54% for Europe, 36% for North America, and 10% for APAC and the rest of the world. We have seen a return to seasonal variations that prevailed before the pandemic, with lower activity in the first and fourth quarter due to winter conditions. We believe that this will continue going forward. After heavy CapEx investments in years in 2022, 2023, and 2024, and in 2024, an overall CapEx investment of SEK 286 million, or 5% of sales, our estimate is that we'll be around 3%-4% going forward. These investments are mainly related to maintenance or small capacity investments. Overall, in the business area of fiber solutions, there is continued need for building fiber optic networks in major markets to increase coverage and penetration. In the harsh environment, we have five operating units. They are based in the U.S., and Europe.
We have Rochester Cable in the U.S., and we have FiberOn Cable, Tech Optics, Proximion, and part of Hexatronic Norway in Europe. We had a total sales of almost SEK 1.2 billion and an EBITDA of 121 million, or 10.3%, for the full year of 2024. As reported in the year-end report for 2024, we had a full year growth compared to 2023 of 15.9%, or SEK 371 million, for our focus area harsh environment. Now, when implementing the updated segment reporting and change to business areas, we have another increase of SEK 78 million. That leads to a growth of 61.6% for the business area of Harsh Environment. The change is mainly related to the reclassification of customers that belong to harsh environment. The growth overall from 2023 to 2024 has been mainly driven by the acquisitions we've done.
The geographical split was 45% in Europe, 46% in North America, and 10% in APAC. The EBITDA margin is, as Jakob was saying, below where we aim to be. This is due to the challenges we've had in Rochester. The carve-out from TE Connectivity back in March 2023 has been tougher than we expected. We have a plan to improve operational efficiency through training, as well as investments in equipment, etc. In 2024, we had an overall CapEx investment of $34 million, or 3% of sales. Our estimate is that we will be around 5% going forward due to the investments needed in both maintenance, but also in capacity investments. We have an attractive M&A pipeline, and the targets are dynamic cables and connector businesses. There is a strong market outlook beyond 2030 as energy and defense markets exceed to remain strong. That is driven by long-term global trends.
If we then move over to Data Center, we have three operating units that are based in the U.S., and Europe. We have the DCS, USNET in the U.S., and the IDS group and Qubix in Europe. We had a total sales of almost SEK 1 billion and an EBITDA of 154%, or 15.9% for the full year of 2024. As reported in the year-end report of 2024, we had a full year growth compared to 2023 of 18.6%, or SEK 152 million. Now, when implementing the updated segment reporting and change to business area Data Center, the change is very small, but that leads to a growth of 18.7%. The growth, as Martin was talking about before, is driven both from organic and acquisition-driven growth. The geographical split was 62% in Europe, 36% in North America, and 2% in APAC or rest of the world.
Sales is normally stronger in the first half of the year due to the second half of the year. That is mainly due to vacation periods, both in Q3 and Q4, and less working days. For our product sales, many of our customers optimize their stock at year-end. Overall, our Data Center business is a capital-light business. In 2024, overall CapEx investments were SEK 5 million, or less than 1% of sales. Our estimate is that we will continue to be less than 1% going forward. As Martin presented earlier, our data center business is a market with strong underlying market growth. We want to expand our service offering through strategic acquisitions, and we have an active M&A agenda.
Going back to the long term of our development of our performance, Hexatronic Group have had a 33% sales growth driven by both organic and acquisition during the last five years. As I said, organically, we have grown with 7%, even if 2024 was a challenging year, mainly for the F iber Solutions business area, where we went from record sales in 2023 to a steep downturn in the second half of 2023. If we look at our EBITDA, we've had a CAGR of 43% and earnings per share of 36% CAGR. We have had a focus and will continue to have a focus on working on our operating cash flow. That has been mainly by working on reducing our working capital, and that has led to good cash conversion in the last years.
After two investment-heavy years, or actually three, in 2022 and 2023, and after then the completion in 2024 of the investment program in the Duct Factory in Utah, we believe that we were able to grow for several years without any extensive investments in the Fiber Solutions. As early communicate, our estimate is that investments onward will amount to, for the group, approximately 3%-4% of sales yearly, and of which 1%-2% are expected to be maintenance investments. The reduced net debt of SEK 240 million in 2024 could not cover for the reduced EBITDA proforma, leading to an increase of leverage compared to the prior year. Leverage net debt divided by EBITDA, including IFRS 16, adds 2.2 x, excluding lease liabilities, 1.9x. That is related to our bank covenant.
At the end of 2024, we had SEK 633 million of cash and SEK 1.3 billion of unutilized backup facilities, which gives us a total liquidity of SEK 1.9 billion. We have a continued solid financial position. By that, I want to hand over to Rikard again.
Thank you, Pernilla. All right. We have heard from the three business areas now, as well as the restated financials. I hope that leaves everyone with a much better understanding for the business areas, their opportunities and challenges, strategies, and different dynamics. Just to recap, for Fiber Solutions, we will continue to focus on winning with small and medium-sized customers. The way to do that is by providing them with solutions for optimizing their productivity and their total cost of ownership, as we heard from Tomas. The U.S., is a major opportunity for us to take market share.
In Europe, in particular, we're focusing on operational excellence. We'll also pursue further growth in segments adjacent to the FTTH space, like submarine, wireless, and security. Harsh Environment, short-term priority on improving profitability. We will also pursue growth, both organic and through M&A. For Data Centers, focus on Europe and North America, expanding our service offering, and also here pursuing growth through M&A. I hope that you're all taking away the following key messages from the session overall. One, Hexatronic is a global and diversified business with attractive growth opportunities. Two, the new business areas will increase our focus and help drive our growth. Three, we have an interesting and actionable M&A pipeline with focus on Harsh Environment and Data Center. Finally, we're looking forward to updating everyone on our Q1 results on April 29.
With that, we will actually conclude today's presentation part, and we move on now to the Q&A. I will welcome Pernilla and Martin back up on the stage.
Thank you. We will start with some questions here. The first question is for you, Martin. For the Data Center segment, could you give an indication of the subsegment split, hyperscale, enterprise, etc., for the segment?
Sure. If we start with the enterprise, enterprise today accounts for roughly 30% of our sales. Hyperscale, we typically group together with colocations, and then it accounts for 40%. The rationale for grouping them together is, as Ben earlier described, that we have the class A and class B, so they are very intertwined and hard to separate. Our approximation is that otherwise hyperscale is roughly 25%, but together 40%. They have very similar growth nature. Thank you.
Rikard, you have previously indicated that both Data Center segment and the Harsh Environment segment are operating at a 50% margin. However, according to the release numbers, harsh environment was 10.2% during 2024. Why is that, and what level are you aiming for going ahead?
Yes, good question. I think it has been discussed a bit. It's quite clear that it's predominantly in the Rochester business unit that margin is lower. The team has a plan that looks quite solid. In fact, I will be there next week to talk to the team and check on that plan. That is the main reason, and we don't see any reason longer term why that business should be structurally at a lower margin than FiberOn, for example.
Thank you. What impact will the US tariffs have on your business? What percentage of U.S. sales comes from products manufactured domestically?
Yes, this is the million-dollar question. If you can tell me what the tariffs will be, we can calculate the answer. No one really knows where it will land. We are obviously following this quite closely. I'm used to this type of question from my previous life, where it was a much bigger challenge. As we have talked about, most of our production today is local, also for the U.S. I don't think we want to give a number, but it's relatively small, and there are also some things that we can do to minimize it further. The main one being the decision we made to produce cable also in the U.S. in one of our facilities there.
On that note, one question around Martin here. What will be the investment cost and return on investment for new cable operations in Clinton, USA?
Yes, I think we also partly covered that in the past. It's a smaller site, and it's a smaller investment, and most of the lines will be moved from our plants in Sweden. It's quite a small investment for us.
A question to you, Rikard, here. Can you elaborate a bit on the growth opportunity in the US? According to various industry sources, the FTTH market is expected to grow strongly over the next couple of years. How can we expect the FTTH projects and the conduit and pipe demand for both 2025 and beyond?
I think you have to peel that onion a little bit. For the conduit market, we are not market leader, but we're a sizable player there. Now, with our investments and the recent opening of the site in Utah, we do cover the country, and this is a way that we can serve our customers all over the country. Being a sizable player, of course, we want to grow with the market, but we also feel that there are chances to take market share. On the microduct and cable side, it's a little bit different. We are a relatively small player there, and here it's all about taking market share and moving slowly but steadily the market towards the airblown technology that is much more prevalent in Europe. The US market, we feel, is a bit behind still on that.
It's a question primarily to you and me, Martin here. If you give a general description of the overall market situation today compared to a year ago, is demand stronger, flat, weaker, or are customers more or less cautious?
I mean, it's a difficult question. We are a very diversified business. We have three different business areas. We are well diversified also geographically. I think the short answer is, I mean, we said we are cautiously optimistic for the year. Some areas a bit more demanded, some a bit softer. Overall, I think cautiously optimistic summarizes it.
Thank you. I think we have answered that, but just to make sure that we answer it. If you look at your total sales in the U.S., what proportion was achieved with products imported from Europe?
Just reiterating what Rikard said, I mean, we have six production plants in the U.S. We have production locally there for all our business areas. It's a small portion. Also, as you said, I mean, moving production of cables to the States and so on, it's a very small one.
The BEAD program in the US, please explain what you expect in terms of phasing of orders for Hexatronic in 2025 and 2026.
Yeah, the BEAD program is another one that a lot of speculations and rumors, some statements from the White House and administration. I think it's first, I think it's important to note that the main part of the market is and remains privately funded, and BEAD or other government subsidies should be sort of cherry on the cake in terms of driving demand. The signals that we are seeing from BEAD is that it looks like it is moving forward, and if anything, the administration looks to be that they want to speed it up and eliminate some red tape and bureaucracy around it. There's also speculation about maybe that the split between technologies, satellite-based versus fiber-based, will shift. Earlier comments were 90-10, with 90% being fiber-based, and now some people are saying maybe it's 25%, maybe it's more that will be satellite-based, but it will be, looks like it will be still both, and that the ultimate decision will be made on the state levels depending on what suits for each state.
Thank you. We have a question for you, Jakob then. Can you describe in more detail what the challenges related to Rochester have been?
Yeah, is the mic on? Okay. Yeah, I think what really, it's of course more than one thing, but it's primarily the fact that we underestimated the lack of preventive maintenance that were done by the previous owner. We did not really see that challenge before coming into 2024, where we had a steep growth in order intake, and by pushing the equipment, you tend to break it. In this industry, it's not just a quick fix. You need to invest upfront. You need to also procure and secure that you have a supply of extra gear shifts, etc. We clearly underestimated that. You can also see then in the second half of last year, we have beefed up the preventive maintenance quite severely. We do believe that that will show in the figures going forward in a positive way.
Thank you. Martin then, what is the rationale for reporting subsea cable sales in fiber solution as opposed to harsh?
Today we have our fiber cable for the submarine produced in Hudiksvall. It is for the telecommunication customers, and it is also quite different cables, both in terms of length and technology. Therefore it is in the fiber solutions part.
Thank you. Let's see. What will the shift from homes passed to homes connected in Europe mean for Hexatronic? Is your market position stronger in either? Do you want to take that one, Martin?
Should we ask Christian maybe?
Yeah.
Sure. In the past several years, the focus has been with many providers on homes passed. This has been the growth that you have seen in the slides and in the market and in different market data that has been publicized. Providers have had total focus on homes passed, and not many connections have been done. Now, with the increase of interest rates and banks being more critical, if we can say it like that, business plans have had to be revised. Providers have had the pressure to make money, so they need to connect customers to get the revenue streams from the customers. Just recently, and I'm talking here the past, let's say, 6 months-12 months, providers have had more focus on homes connections. Homes connections is a smaller business than homes passed, but it's growing, and it's growing in key markets like Germany, which has a very, very big gap between homes passed and homes connections. Homes connections are also quite a profitable business for Hexatronic. We have very strong solutions that will give or give advantages to our customers.
Thank you. How has your market share in the U.S., for fiber solutions developed during 2024? Previously, you have talked about increasing your share of the market due to your airblown fiber technology.
Yes. In the U.S., I mean, we have a very small market share in the fiber to home in the U.S., introducing this new technology. I think initially Rikard talked about, I mean, we are investing there. We will take market share and continue to grow the business, but great opportunity to grow because we have a very, very small market share on the market over there.
Do you see similar investment programs such as BEAD in the U.S., also in Europe and rest of the world? What could you capitalize into?
There was a very large infrastructure package launched or announced in Germany, I think EUR 500 billion, if I'm not mistaken. It's a broader infrastructure program, so we don't know how much will be bridges and roads and so on, but I would expect that some communications would be part of it.
Excellent. I think that all questions are done.
Okay. Thank you, everyone. Thanks to all the presenters, and thank you, everyone logging in, and we'll see you on April 29th.